Wetland bank up and running in Iowa
By Janet Kubat Willette
jkubat@agrinews.com
Date Modified: 02/09/2012 3:44 PM
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MANKATO, Minn. — Iowa's wetland mitigation bank is up and running.
The bank has deposited 21 credits and sold 10.3 credits in the last couple months, said Kevin Griggs, who is the contract manager for Iowa Agricultural Mitigation Inc. A waiting list to purchase credits existed by the time the credits were available, he said.
Iowa Agricultural Mitigation Inc. formed in June 2010 as a 501c5 nonprofit corporation. The main players in organizing the corporation for agricultural wetland banking were the Iowa League of RC&Ds and the Iowa Natural Heritage Foundation.
Thee two organizations provided the initial energy and driving support behind the project, Griggs said. They wrote grant applications to secure funding to get the project running.
The Iowa Farm Bureau Federation ran a bank prior to the establishment of Iowa Agricultural Mitigation Inc. and offered advice, support and use of their planning documents to the group, Griggs said.
The focus of the founders of Iowa Agricultural Mitigation Inc. is to provide affordable mitigation alternatives for farmers. They have been able to accomplish that goal so far by working with friendly landowners.
One landowner had done a wetland restoration at his own expense and was looking for a partner to purchase an easement. In the second case, only minor restoration work was needed to remove infrastructure installed on the land over the last couple decades. The established wetland was well-functioning.
The landowners sold Iowa Agricultural Mitigation a permanent easement on their property through a contract. Every time a credit is sold, a percentage of that goes to the landowner. By the time 40 percent of the credits are sold, the easement will be paid off, Griggs said.
This allowed the new organization to get rolling. It's unlikely any lender would have provided financing to purchase the easements outright, he said. Now, the wetland bank will have resources and a plan to take to the lender when it purchases future easements.
Interest exists from landowners in banking wetland credits, Griggs said. He's received at least a half-dozen calls from landowners in the past six months. One is a Wetland Reserve Program applicant who didn't score high enough to get into the program. The mitigation group is deciding where the most need is to develop the next site. As in Minnesota, credits need to be purchased in the same wetland service area. The current sites are in north central Iowa.
The landowner retains ownership of the property and is able to use it for recreation. The easement is in essence purchasing the farming rights, Griggs said. The land can be sold and the easement stays with the property.
The initial price for the credits is $8,000 an acre. Farmers need to purchase one credit per acre of wetland they intend to drain or fill.
The price is a starting point for negotiation. It's intended to be a floating price depending on current market conditions. The wetland bank hasn't raised prices yet because they know their costs on the two existing sites. However, when they add future sites the price will change depending on costs.
"I can't stress enough the importance of understanding the market," Griggs said.
It's a challenge to develop a wetland if there are no customers to purchase credits. Likewise, if the price for credits is too high, customers will find other ways to mitigate wetland losses.